Slide 1: Welcome – Annual Results 2012
WELCOME ANNUAL RESULTS 2012
Slide 2: Performance & Operations
PERFORMANCE & OPERATIONS Pierre van Tonder
Slide 3: Overview
OVERVIEW • Difficult trading conditions in SA – Consumers cash strapped • High cost of living – Competitive retail environment • Success of the group’s restaurants due to: – Innovative product offerings – Aggressive promotions strategy – Stringent operational disciplines
Slide 4: Overview continued
OVERVIEW continued • Trading conditions remain difficult in offshore markets • UK – Customers focused on “value for money” • Australia – Challenging trading conditions – No growth in the retail sector – Rising labour and utility costs
Slide 5: Overview
OVERVIEW • 14.2% turnover growth – M enu price increases of 5.8% in November 2011 and 4.6% in April 2012 – Existing business growth 12.0% • pened 12 new restaurants O in SA • Relocated eight and revamped 56 restaurants – R34m invested by franchisees – Turnover increased • 254 restaurants in SA
Slide 6: Overview continued
OVERVIEW continued • Continued success of the Spur breakfast offering • Excellent regional marketing initiatives • Continuation of weekday specials • Success of loyalty programmes – 1.14m Family Card members, 27% of restaurant turnover, 20% higher spend – 1.12m Secret Tribe members • Gift card to be
Slide 7: Overview
OVERVIEW • 14.7% turnover growth – M enu price increases of 3.4% in December 2011 and 3.9% in June 2012 • New sit-down menu launched • Introduction of – R19.95 breakfast promotion – Slice bars – Kids facilities • Entrenchment of weekday specials • Opened three restaurants • Eight restaurants revampe
Slide 8: Overview
OVERVIEW • Now 100% owned by Spur Group • 14.2% turnover growth – Existing business growth 14.0% – Menu price increases of 4.8% in December 2011 and 7% in June 2012 • One new restaurant • Total restaurants now 28 • New menus launched June 2012 – Add to customer value proposition and brand equity
Slide 9: Overview
OVERVIEW • Acquired 1 March 2012 • SR chain offering a combination Q of chicken, seafood and burgers • Opened two new restaurants • 74 restaurants – S trong presence in the Free State, Gauteng and Eastern Cape • Seamless integration of operations and BOH into Spur • ew menu to be launched towards N
Slide 10: Procurement, Warehousing & Distribution
PROCUREMENT, WAREHOUSING & DISTRIBUTION • Continued growth in basket – New products added – Increased participation by franchisees – Volume increased 10.7% • 4 151 634 cases delivered to our restaurants • Focus on structured audits – Quality – Compliance to specifications • DoRego’s depot incorporat
Slide 11: Manufacturing
MANUFACTURING • S uccessful consolidation of the two central kitchens into a single facility • Focus on upgrading of the premises • Installation of a bottling plant • Product development – New sauces investigated/tested – Existing sauces brought in-house – Product improvement • Manufacture for exter
Slide 12: International – Africa & Mauritius
INTERNATIONAL – Africa & Mauritius • S pur brand successfully re-launched and well-received in Zambia • Opened first store in Nigeria, Lagos • Strong footprint in Botswana with Spur – Opened first Panarottis in Gaborone • Namibia remains an attractive market – Entered northern Namibia with a Spur in
Slide 13: International – UK & Ireland
INTERNATIONAL – UK & Ireland • Ireland – Tough economic environment • United Kingdom – Turnaround in profitability – Cheyenne Spur (O2 Centre) refurbished – Wandsworth, Aberdeen and Belfast restaurants trading aggressively – Golden Gate Spur (Gatehead) is trading at break-even levels – Established r
Slide 14: International - Australia
INTERNATIONAL - Australia • Difficult trading conditions • Emphasis on local marketing promotions • ocus continues on controlling labour costs and overheads, F especially energy costs • Currently re-engineering the Panarottis menu • Franchisees looking at new sites in northern Perth • pportunity for
Slide 15: Environmental Sustainability
ENVIRONMENTAL SUSTAINABILITY • Ongoing training • Waste programmes – a verage of 87% of waste recycled at Cape Town Head office • Energy savings campaign in restaurants • ase line audit on energy efficiencies B at three restaurants • Sustainability awareness: – Totem Magazine – Eco Warrior website:
Slide 16: Information Technology
INFORMATION TECHNOLOGY • Restaurants – S QL Upgrade – by end of December 2012 all brands (excl. DoRego’s) will be on SQL platform • Business Intelligence (BI) – Loyalty – Gift card • Sales mix – Speed of Service – Digital advertising network • Head Office – Data warehouse (BI) – Call Centre – in-hou
Slide 17: Training
TRAINING • Trained a total of 5 171 delegates in 2012 FY • 12 training stores located throughout the country • College of Excellence – C ATHSSETA accreditation received – Ten graduates during the year and six more commenced training • A number of new training programmes in the process of being devel
Slide 18: Spur Foundation
SPUR FOUNDATION • R670 000 donation by Spur Group • “Nurture, Nourish, Now” • Feed and educate children • Beneficiaries: – JAM – Creating Change – Sisanda Fundaytion – Teddy Bear Clinic – Foodbank – Reach for a Dream
Slide 19: Restaurant Base
RESTAURANT BASE Franchise Brand South Africa International Total Spur Steak Ranches 254 37 291 Panarottis Pizza Pasta 52 11 63 John Dory’s Fish Grill Sushi 28 - 28 DoRego’s 74 - 74 Total 408 48 456
Slide 20: Financial Performance
FINANCIAL PERFORMANCE Ronel van Dijk
Slide 21: Financial Highlights
FINANCIAL HIGHLIGHTS • Revenue up 24.8% • Operating profit up 50.9% • Headline earnings up 30.4% • Diluted HEPS up 31.4% • Distribution per share up 31.8% to 87.0 cents
Slide 22: Franchise – Spur SA
FRANCHISE – SPUR SA % R’000 2012 2011 change Revenue 155 433 137 004 13.5 Operating profit 136 447 118 712 14.9 Operating margin 87.8 % 86.6 % • Franchise fee increased while costs contained • Increased margin despite once off nutritional analysis costs
Slide 23: Franchise – Panarottis SA
FRANCHISE – PANAROTTIS SA % R’000 2012 2011 change Revenue 12 952 11 526 12.4 Operating profit 7 866 6 837 15.1 Operating margin 60.7 % 59.3 % • F ranchise fee increased while costs contained (PY new COO handover costs incurred) • Increased margin despite marketing contribution
Slide 24: Franchise – John Dory's
FRANCHISE – JOHN DORY’S % R’000 2012 2011 change Revenue 11 092 9 782 13.4 Operating profit 5 818 4 543 28.1 Operating margin 52.5 % 46.4 % • Franchise fee increased while costs contained
Slide 25: Franchise – DoRego's
FRANCHISE – DOREGO’S R’000 2012 Franchise revenue 2 498 Operating profit 928 Operating margin 37.1 % • Acquired 1 March 2012
Slide 26: Wholesale and Distribution
WHOLESALE AND DISTRIBUTION % R’000 2012 2011 change Revenue 142 821 109 043 31.0 Operating profit 55 662 49 633 12.1 Exceptional items Manufacturing facility relocation, revamp & retrenchments 259 951 DoRego’s depot (948 ) - Adjusted operating profit 54 973 50 584 8.7 Adjusted operating margin 46.1
Slide 27: Corporate Services & Other SA
CORPORATE SERVICES & OTHER SA R’000 2012 2011 % change Revenue 34 600 19 749 75.2 Operating loss (35 018) (34 918) (0.3 ) Exceptional items (6 570) (2 702) Capital profit on sale of Gauteng building - (1 205) Gauteng office and Decor relocation 232 182 IFRS 2 (net of related hedge) (3 514) 3 182 Due
Slide 28: United Kingdom
UNITED KINGDOM R’000 2012 2011 % change Revenue 81 631 65 936 23.8 Operating profit/(loss) 694 (27 688) Exceptional items (843) 21 070 Restaurant impairments - 13 534 Gain on realisation of collateral (843) - Depreciation on impaired assets - 1 482 Goodwill impairment - 4 948 Yellowstone trading los
Slide 29: United Kingdom continued
UNITED KINGDOM continued R’000 2012 2011 Cash flow profit/(loss) 3 971 (882) Exceptional items - 904 Yellowstone trading losses - 904 Adjusted cash flow profit 3 971 22
Slide 30: Australia
AUSTRALIA % R’000 2012 2011 change Revenue 53 140 43 464 22.3 Operating loss (682) (1 279) Exceptional item Impairment 1 564 - Adjusted operating profit/(loss) 882 (1 279) Cash flow profit 3 078 1 480
Slide 31: International Other & Corporate Services
INTERNATIONAL OTHER & CORPORATE SERVICES R’000 2012 2011 % change International other Revenue 9 277 6 892 34.6 Operating profit 5 305 5 226 1.5 Operating margin 57.2% 75.8 International Corporate Services Operating loss (1 920) (4 236) Exceptional item Foreign exchange (gain)/loss (2 288) 794 Adjust
Slide 32: Comparable Profit Before Tax
COMPARABLE PROFIT BEFORE TAX % R’000 2012 2011 change Profit before tax 175 100 116 830 49.9 IFRS2 charge (net of related hedge) (3 514) 3 182 Manufacturing and distribution (689) 951 exceptional items Corporate services and other 3 124 182 exceptional items UK exceptional items (843) 21 070 Austral
Slide 33: Financial Position – Assets
FINANCIAL POSITION – Assets R’000 2012 2011 Property, plant & equipment 73 492 70 387 Intangible assets & goodwill 320 986 281 477 Investments & loans 8 818 5 857 Deferred tax 7 776 11 967 Leasing rights 1 826 1 798 Derivative financial assets 4 654 - Inventory 10 304 5 621 Taxation receivable 5 488
Slide 34: Financial Position – Equity & Liabilities
FINANCIAL POSITION – Equity & Liabilities R’000 2012 2011 Equity 425 606 408 236 Long-term loans 446 2 923 Operating lease liability 6 564 6 531 Other non-current liabilities 4 520 3 182 Deferred tax 69 048 60 454 Bank overdrafts 1 854 2 256 Taxation 6 052 6 622 Trade & other payables 89 004 65 147
Slide 35: Cash Utilisation
CASH UTILISATION R’000 2012 2011 Cash from operations 171 060 144 655 Net interest received 6 164 4 861 177 224 149 516 Distributions paid (65 108) (54 785) Taxation paid (58 578) (41 149) Working capital changes 6 378 2 631 Investment in fixed assets (6 204) (31 089) Acquisition of DoRego’s & John
Slide 36: Outlook for 2013
OUTLOOK FOR 2013 Pierre van Tonder
Slide 37: Outlook: Spur South Africa
• onsumer cash flow under C • pur Family Card weekday S pressure specials • Opening 11 new restaurants • ngoing regional marketing O • Momentum in breakfast menu initiatives
Slide 38: Outlook: Panarottis
• Opening seven new restaurants • Revamping of existing branches • Improve family offering – upgrading kids’ facilities • Aggressive marketing campaigns
Slide 39: Outlook: John Dory's
• Opening eight new restaurants • Refurbishment of existing restaurants • New menu innovation • Operational / Food entrenchment / Franchisees
Slide 40: Outlook: DoRego's
• Opening 10 - 15 new restaurants • Extension of distribution centre basket • New menu to be launched towards the end of 2012 calendar year • Back of house integration into Spur Group • Revamps scheduled • Training
Slide 41: Procurement & Manufacturing
PROCUREMENT & MANUFACTURING • Increase basket size • Supplier partnerships • Bottling plant • P roduction increase – to begin manufacturing for John Dory’s, Panarottis and DoRego’s, historically only Spur
Slide 42: Selective international openings, mostly in Africa
• Selective international openings, mostly in Africa • Abuja (Nigeria), Nairobi (Kenya), Swaziland, Dar-es-Salaam (Tanzania) and Lusaka (Zambia) – all 2nd stores in these countries • T wo restaurants planned for Namibia, two in Mauritius and one in the Seychelles.
Slide 43: Questions?
QUESTIONS?
Slide 44: Thank you
Thank you